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Logistics Overview

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Session Objectives Definition of logistics Logistics & supply chain management differentiation Objectives of logistics management

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Logistics Origin The word logistics traces its origin to the Greek word logistikos and the Latin word logisticus, meaning the science of computing and calculating. 

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Logistics History Great Pyramid of Giza [2700 BC] Steam Engine [1800] World War I [1914-18] Invention of Sea Container [1956 - Malcom P Mclean] Kanban & JIT concepts [1970-1980] 

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Logistics Definition “Planning, implementing and controlling the physical flows of materials and finished goods from point of origin to point of use to meet the customer’s needs at a profit.”[Philip Kotler]

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Logistics Definition“The process of planning, implementing and controlling the efficient, cost effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of confirming to customers’ requirements.”[The American Council of Logistics Management]

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Logistics Definition“Logistics is essentially a planning process and an information-based activity.”[Martin Christopher]“The corporate traffic cop,” which directs the flow of material from the source through the production and distribution to the final customer.[Philip scary]

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Logistics DefinitionLogistics vs. Physical Distribution

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Pervasiveness of logistics [Example-1]Logic in Logistics for 30-minute PizzaOrder registration: 1 minuteMake line: 2 minutesOven time: 5 minutesInspection, quality check & packing: 1 minuteRoute checking & final confirmation: 1 minuteOut of door time: 10-12 minutesPunch in time: on return

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Pervasiveness of logistics [Example-1]Logic in Logistics for 30-minute PizzaImportance: Process Sequencing, Just-in-Time inventory availability and time management for success in this service operations logistics. 

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Pervasiveness of logistics [Example-2]24 Hour ATMLogistics aspects: Availability and continuous supply of currency notes Information availability to customers on credit limits available at time of withdrawal Data mining with automatic updating for real-time information on creditworthiness E-business solutions takes care of the complex transaction process involved in ATM operations

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Pervasiveness of logistics [Example-3]Dabbawala’s of Mumbai  Over 2,00,000 office employees are catered to daily 5000 men & women (mostly illiterate) operate in assigned areas in Mumbai Each handles an optimum lot size of 25-30 tiffin boxes Dabbas collected from houses and put in tiffin racks at a network of 96 railway stations across Mumbai Use of colour code system on dabbas to identify collection and delivery points After lunch time operation works in reverse direction

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Pervasiveness of logistics [Example-3]Dabbawala’s of Mumbai Logistics aspects: Timely collections and deliveries Error free deliveries and pick-ups Smooth working against odds of rains, scorching heat, strikes etc Precision of six sigma accuracy

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Pervasiveness of logistics [Example-4]Laundry Service in Five Star HotelsLogistic operations: Collecting laundry from 210 rooms Three parts: staff uniforms, room laundry (bed sheets, pillow covers) and guest clothes Special attention given to guest clothes for express or same day delivery Identification code, and the punching into the computer for tracking, processing and final delivery Hand over to the laundry service supplier, who delivers it in the evening to the housekeeping department

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Objectives – Logistics ManagementThe primary objective of a logistics system is to move the inventory in a supply chain effectively and efficiently to extend the desired level of customer service at the least cost.

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Objectives – Logistics ManagementBased on Manufacturer’s viewpoint Minimise transportation cost for raw materials Reduce inventory cost Freight reductions [Consolidations, Load unitising] Proper Planning & Routing of transportation from their warehouse to destination Eliminate warehousing charges Proper scheduling to reduce material-handling costs

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Objectives – Logistics ManagementBased on Logistician’s viewpoint Scheduling transportation modes for good time management Offer competitive rates to clients Providing good service levels Acting as representatives for Traders in International Trade

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Objectives – Logistics ManagementBased on Customer’s viewpoint Timely Deliveries Error free documentation Safe deliveries of their shipments/ Minimum product damages Perfect stock maintenance Low distribution costs for competitive advantage Reliable & consistent delivery performance

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